UniCredit International Investors Conference January 2008, Kitzbühel

Transcription

1 UniCredit International Investors Conference January 2008, Kitzbühel Operating in a challenging environment Gabriele Werzer, Head of IR, Erste Group

2 Disclaimer Cautionary note regarding forward-looking statements THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON, THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THIS INFORMATION OR OPINIONS CONTAINED HEREIN. CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT MAY BE STATEMENTS OF FUTURE EXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT S CURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS. NONE OF ERSTE BANK OR ANY OF ITS AFFILIATES, ADVISORS OR REPRESENTATIVES SHALL HAVE ANY LIABILITY WHATSOEVER (IN NEGLIGENCE OR OTHERWISE) FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS DOCUMENT OR ITS CONTENT OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SHARES AND NEITHER IT NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER January

3 Presentation topics Answering the market s concerns Growth opportunities remain in place Reconfirming outlook and targets January

4 Answering the market s concerns: Macro Romania - private sector credit at low levels January Source of Charts: Bear Stearns International

5 Answering the market s concerns: Macro CEE exchange rates less volatile than perceived 5-year exchange rate history (indexed, nominal) Dec.02 Apr.03 Aug.03 Dec.03 Apr.04 Aug.04 Dec.04 Apr.05 Aug.05 Dec.05 Apr.06 Aug.06 Dec.06 Apr.07 Aug.07 CZK HUF RON SKK January

6 Answering the market s concerns: Macro Romania economic catch-up process to continue GDP is expected to grow at around 6% Household consumption likely to slow down gradually Expected outcome on medium term Consumption will be covered more and more domestically Foreign demand (net exports) will continue to contribute negatively to GDP formation Imports will be stimulated by strong investments Structure of exports has improved Capital goods and high value added products have now higher profiles within total exports Imports are more oriented towards capital goods Imports of consumption goods are stable % 100% 80% 60% 40% 20% 0% GDP development (yoy growth) 2007f 2008f 2009f Final Consumption Imports Exports GDP growth (rhs) Improving structure of trade Exp. Exp. Exp. Exp. Exp. Imp. Imp. Imp. Imp Aug Aug. % Other Intermediary (including fuels) Consumption Capital and high value added products Source: NIS, BCR Research January

7 Answering the market s concerns: Credit Subprime crisis limited impact on Erste Group We adhere to strict investment guidelines We have no direct/indirect exposure to subprime markets and the US real estate market No further write-downs since Q3 07 No further revaluations expected under present market conditions Portfolio snapshot: Valuation date Face Value Mark-to-market valuation Q3 07 AfS Portfolio (equity) Fair Value Portfolio (P&L) Overall Portfolio 30 September 2007 EUR 3,237m -EUR 54m -EUR 20m CLOs/CDOs 30 September 2007 EUR 1,209m January

8 Answering the market s concerns: Capital Goodwill as an indicator of future potential Composition of EUR 6.2bn intangible assets (Q / in EUR m) BCR BCR customer relationships (amortised) BCR brand 313 2,939 Ceska goodwill Postabank goodwill Slovenska goodwill Other goodwill Total equity of EB Group at Q3 07: EUR 11.31bn - including EUR 2.9bn minorities Other (software) January

9 Answering the market s concerns: Costs Cost growth under control Cost guidance for 2007 confirmed costs expected to increase by about 25% Expenses in first nine month of 2007 increased by 7.7% on an adjusted basis 5-year operating expense analysis costs adjusted for acquisitions & one-offs 2,800 2, in EUR million 2,300 1,800 1, ,837 1,953 1, % 2, % +28.8% , % % ex BCR ex DCA, EB UA ex Group projects adjusted costs January

10 Presentation topics Answering the market s concerns Growth opportunities remain in place Reconfirming outlook and targets January

11 Setting the scene for future growth EU membership, emerging markets opportunity Euro zone Slovakia Population: 314m Population: 5.4m FUM/capita: 20,200 Population: 10.2m FUM/capita: 700 FUM/capita: 900 Housing/GDP: 48% Housing/GDP: 5% Czech R Housing/GDP: 12% Austria Hungary Population: 8.3m Population: 10.1m FUM/capita: 20,300 FUM/capita: 1,000 Housing/GDP: 23% Housing/GDP: 12% Ukraine Population: 47.0m FUM/capita: nm Housing/GDP: nm Croatia Population: 4.4m FUM/capita: 600 Housing/GDP: 15% Romania Serbia Population: 21.6m Population: 7.5m FUM/capita: 7 FUM/capita: nm Source: NBs, Erste Research Housing/GDP: 2% Housing/GDP: 3% January FUM = funds under management in EUR Housing/GDP = Housing loan penetration

12 Abundant growth opportunities Example - mortgage lending Ceska sporitelna has a market share of 34% in mortgage loans The mortgage loan opportunity in CZ ,30 million Favourable macro environment in CEE Real growth of 4-8% in most CEE markets Continued strong FDI inflows Euro adoption in most CEE countries within the foreseeable future Superior customer base in terms of future potential 16.1 million retail customers Under penetrated banking markets Customers 130,000 0,13 # of disbursed mortgage loans Foundation for above-average growth is under-penetration in key product areas Outperforming the fastest-growing markets in the EU January

13 The mortgage loan opportunity Penetration rates indicate long term growth Retail loan penetration - Romania Retail loan penetration - Czech Republic 15% 12% 9% 6% 3% 0% 11.5% 12.4% 7.4% 3.8% 4.8% 2.3% 2.3% 1.4% 1.4% 1.8% 0.0% 0.0% Jun 07 20% 15% 10% 5% 0% 16.5% 17.1% 13.8% 11.1% 9.1% 7.2% 11.5% 12.1% 9.4% 7.4% 6.0% 4.5% Jun 07 Household loans/gdp Housing loans/gdp Household loans/gdp Housing loans/gdp Retail loan penetration - Hungary Retail loan penetration - Slovakia 25% 20% 15% 10% 5% 0% 12.4% 14.5% 19.9% 19.9% 17.2% 8.5% 11.4% 11.0% 8.0% 9.2% 10.4% 4.5% Jun 07 16% 14% 12% 10% 8% 6% 4% 2% 0% 5.5% 7.0% 8.7% 1.1% 11.3% 2.0% 2.9% 4.3% 13.5% 13.7% 5.3% 7.5% Jun 07 Household loans/gdp Housing loans/gdp Household loans/gdp Housing loans/gdp Source: NBs, Erste Research January

14 The fund management opportunity Much of the growth still lies ahead Funds under management/capita (2006) in EUR thousand Developing transformation economies Emerging transformation economies Austria Czech R Hungary Slovakia Croatia Serbia Romania Erste Research January

15 Presentation topics Answering the market s concerns Growth opportunities remain in place Reconfirming outlook and targets January

16 financial highlights Net profit improves quarter on quarter Net profit up 27.9% ytd to EUR 837.9m Cash earnings per share * Total assets up 10.4% to EUR 200.6bn Tier 1 ratio at 6.2% Expected to reach % at YE 07 Cash EPS grew to EUR 2.80 Cash ROE at 14.0% CIR unchanged at 59.9% Cost/income ratio in EUR Cash return on equity * 70% 65% 60% 55% 64.4% 65.2% 62.2% 59.9% 59.9% *) Red bars for denote reported EPS and ROE respectively. Decline in reported and cash ROE reflects 2006 capital increase. EPS calculation based on average number of shares for the period (ex treasury shares and shares owned by savings banks with EB participations) January % 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 16.3% 16.2% 18.9% 13.3% 14.0% 13.5%

17 Outlook Guidance 2007 and 2008 confirmed Guidance 2007 confirmed: Group net profit expected to increase by at least 25% Despite higher integration costs at BCR Driven by faster and more extensive headcount reduction Despite substantially changed market environment Despite higher linear amortisation of value of customer base at BCR and DCA Croatia More detailed outlook for 2008: Group net profit expected to increase by minimum 20% Expenses forecast to grow by about 7% Net profit growth outlook for major CEE subsidiaries for 2008*: CS: Net profit expected to grow by 15 20% SLSP: Net profit growth expected to be around 10% BCR: In line with 3 year guidance net profit to grow by around 40% EB Hungary: Net profit expected to grow above 30% EB Croatia: Net profit expected to grow around 30% *) Based on results as reported by local entities January

18 Outlook Enhanced financial targets to 2009 Net profit (1) growth 2007: > 25% 2008: > 20% 2009: > 25% Cost/income ratio Below 55% in 2009 Return on equity (2) 18-20% in 2009 (1) Net profit after minorities (2) Based on a Tier 1 ratio of at least 7% January

19 Erste Group Creating value through a clear, consistent strategy Consistent but evolving strategy since IPO in 1997 Business focus: Retail Banking Geographic focus: Central and Eastern Europe Efficiency focus: New Group Architecture New Group Architecture Projects New Group Structure Value creation for shareholders January

20 Investor relations contacts Erste Bank, Graben 21, 1010 Vienna Fax +43 (0) Internet: Reuters: ERST.VI Bloomberg: EBS AV Datastream: O:ERS ISIN: AT Investor relations Gabriele Werzer Tel: +43 (0) Thomas Sommerauer Tel: 43 (0) January